Wireless speaker company Sonos sought to capitalise on growth opportunities presented by the rise of music streaming and smart home speakers, filing for an IPO as it attempts to jump-start expansion plans.
In a filing, Sonos said net proceeds of the IPO will be used to fuel a corporate strategy which includes a geographic expansion and broadening its partner ecosystem. The funds might also be used to acquire or invest in complementary businesses, products and technologies, the company added.
The move comes as part of Sonos’ attempt to tap into significant growth in consumption of audio content from the internet. The company pointed out the number of global paid subscribers to music streaming services jumped from 29 million in 2013 to nearly 176 million in 2017: the figure is expected to grow to 293 million by 2021, it said.
Sonos said adoption of voice assistants such as Amazon’s Alexa, Apple’s Siri and Google Assistant had also opened a new door to internet sound content from films, games, music and more, but claimed products currently on the market aren’t designed to maximise the experience.
The company said it sees “a significant opportunity to provide a seamless sound experience that brings connectivity, freedom of content choice, ease of use and high-fidelity sound to the connected home”.
Integration and dependence
Without a voice assistant of its own, Sonos must rely on ecosystem partners. The company already integrated Alexa into its products in late 2017 and plans to introduce Siri and Google Assistant on its speakers sometime in 2018.
But, as those partners are also competitors, Sonos said its success in the market will increasingly rely on their goodwill: “These technology partners may cease doing business with us or disable the technology they provide our products for a variety of reasons, including to promote their products over our own. If these partners disable the integration of their technology into our products, demand for our products may decrease and our sales may be harmed.”